SolarCity (SCTY)

[Foghat]

Vivint solar currently has 1.2 billion of contracted payments remaining after q1. Solar City added 1.2 billion in contracted payments in q1. Only Solar City has a 1 gigawatt factory that someone else is paying to build

Well, I'm sure Buffalo and the state of New York is over the moon to receive the billions in new tax base dollars from new residents and well paid employees and ancillary businesses making more taxable income. Solarcity may single handedly rejuvinate a city that has not seen this much economic activity in nearly 40 years.

To me, Buffalo seems to be the one winning this investment by far. The success of New York's investment will bring many states to Solarcity's doorsteps with incentives to build 5-10GW factories.

i laugh every time I hear people say tesla and Solarcity get hand outs, but at the same time enjoy the bounty of new long term jobs and new roads, better schools, higher quality of life, Solarcity and tesla employee tax dollars have brought and continues to bring to their communities. I think between tesla and Solarcity, they now employ 25k people and counting...

My challenge to those nay sayers is who is doing the same right now in American industry?

 

[ggies07]

new hour long "fireside chat" interview with Solarcity CEO Lyndon Rive...
http://www.youtube.com/playlist?list=PLUrqcWVF3ueknKHCQJtFreSkwKEtcmQsO

After watching these, I have to say it again - I love listening to Lyndon speak. His passion and knowledge is infectious and can see him inspiring people that are in their 20s and younger to make sure the shift continues with their generation.

 

[jhm]

Vivint solar currently has 1.2 billion of contracted payments remaining after q1. Solar City added 1.2 billion in contracted payments in q1. Only Solar City has a 1 gigawatt factory that someone else is paying to build

Here's a quick comparison. Vivint is now worth $1.66B on $1.2B in contracted payments. That's a ratio of 1.38. SolarCity is currently at $5.4B on $6.1B in contracted payments. At Vivint's ratio, SolarCity could be worth $8.44B, which is 56% above current stock price.

This very simple comparison does not account for other assets SolarCity holds, Zep, Silevo, and Riverbend. So this 56% upside is likely quite conservative.

 

[SBenson]

Don't mean to be a party-pooper but even after a big rise today, in my view there is a lot of money left on the table.

SCTY hit 52.77 on 5/20/13. That is more than 2 years ago!

Think of all the progress that has been made over the last two years. Yet, the stock didn't move much at all.

The average analyst price target is 82.20 with the highest at 99 (by Credit Suisse).

I have been worrying, given the price trend, sooner or later the retained value will overtake the market cap and some PE firm or Buffet or whoever else will come over and take the company private, pretty much taking away all the future growth from us... I really hope the stock price will rise in synch with the company growth to avoid that situation.

 

[Jonathan Hewitt]

Don't mean to be a party-pooper but even after a big rise today, in my view there is a lot of money left on the table.

SCTY hit 52.77 on 5/20/13. That is more than 2 years ago!

Think of all the progress that has been made over the last two years. Yet, the stock didn't move much at all.

That's why I bought back in the other week at $57 before the recent drop. I sold out at $55 in 2013. To see it there today with all the good that has happened made me want to get back in.

 

[Foghat]

Jim,
SunEdison bought Vivint for $2.2bln, so much higher ratio. Solarcity is worth 5X that right now. Keep an eye out for what happens in q4 and throughout 2016 when Powerwall installs start to ramp up. California ISO just put out that they are going to accept aggregated distributed energy at market prices. So when we see 10k Powerwall+Solarcity pv installs come on line by the end of the first quarter 2016 and each storage+pv homeowner getting the lowest cost per kWh on the block, there is no way anyone could compete on solarcity's level no matter how much consolidation.

elon proved Friday battery tech is going to make 5% and more improvements every year moving forward so, this is only going to drive Solarcity costs down further and at the same time increase sales many times over. The point of no return will be when homeowners see their bill after aggregation of solar+pv in California starting next year, in my opinion. The 10k nest thermostat giveaway is just a glimpse at what Solarcity is going combine with it and value add along the way.

solarcity and tesla have been planning this for nearly a decade. It is paying and will continue to pay to be a visionary brand that sticks to its independence along with it first mover market position compared to the rest.

sbenson,
yeah it's been frustrating with the volatility, but expected somewhat given the completely new entrance of DG solar as rising powerhouse within the energy sector. No one really knows much about it so when oil goes down some investors freak out, or when utiltiies propose ending net metering or any type of policy change is proposed, they hit the sell button. The other factor is the hedging by being done by those that have given large amounts of capital thus far.

to me, the fundamental shift is clear and no matter how bumpy the road may get along the way, Solarcity is reaching the rare air one way or another...sooner or later... Those big valuations can run, but never hide...

 

[jhm]

This 56% upside takes the stock to $87. Other analysts are doing a more careful job and getting to $100. For me, the 56% upside was enough to motivate me to buy some J16 calls. I expect the market to price most of this upside in pretty fast.

My view is the Vivint acquisition will change the way the market will value distributed solar and disruption in the utilities. I suspect that other installers smaller than SolarCity will become acquisition targets. Utilities need their expertise immediately. I do think that SolarCity is too big for acquisition and doubt that Musk would sell his 20% share. So the utilities will need to cut deals with SolarCity if they want to survive. The more pressure Vivint and all the other installers put on utilities, the more willing they will be to cut deals. So all this is a new day for distributed solar.

 

[Johan]

Ah on such a glorious day as this where TSLA is inching up towards an ATH and we're finally seeing some big moves in the distributed solar business... Where's electracity?

 

[Foghat]

This 56% upside takes the stock to $87. Other analysts are doing a more careful job and getting to $100. For me, the 56% upside was enough to motivate me to buy some J16 calls. I expect the market to price most of this upside in pretty fast.

My view is the Vivint acquisition will change the way the market will value distributed solar and disruption in the utilities. I suspect that other installers smaller than SolarCity will become acquisition targets. Utilities need their expertise immediately. I do think that SolarCity is too big for acquisition and doubt that Musk would sell his 20% share. So the utilities will need to cut deals with SolarCity if they want to survive. The more pressure Vivint and all the other installers put on utilities, the more willing they will be to cut deals. So all this is a new day for distributed solar.

solarcity will never sell. They probably won't do yeidcos for the next 30 years either. Solarcity will be much bigger the local utilties. Solarcity will be a global brand. Solarcity already has possible entries being established in Japan, Australia, Kenya, Tanzania, and the UK as I write this. They are already starting international micro grid pilots using Bitcoin-type payment mechanisms for a pay as you go business model. They are operating 10 years ahead of where they currently are working and already are the #1 residential AND commercial distributed solar energy provider in America. they are developing the biggest community solar in the country, the most micro grid projects in the country, as well as produced the most distributed rooftop solar electricity as a single company on earth.

why would they even remotely want/need to sell?

this acquisition today is a learning moment for the market as to the true value of "retained value" and distributed assets to an energy portfolio. It actually serves more to legitimize(as you've said) Solarcity as the real deal in the energy sector then to give SunEdison any competitive leg up.

 

[SBenson]

why would they even remotely want/need to sell?

There is this concept of hostile takeovers.

Lets suppose the net-retained-value reaches $10B but market cap stays $5B. Then Carl Icahn can come in offer 100% premium and take the company private and put it under his control. Even worse he will finance the purchase putting the company as collateral!

Then what happens to all the future growth? that's simply taken away from us for free.

In my view that's the biggest risk for long term shareholders who want to see a multi-bagger out of SCTY. The stock price better keep up with the company growth or else it can get taken out.

 

[winfield100]

elon proved Friday battery tech is going to make 5% and more improvements every year moving forward..

so any thoughts on the sudden use of a small amount Si in the battery?

 

[jhm]

Jim,
SunEdison bought Vivint for $2.2bln, so much higher ratio. Solarcity is worth 5X that right now. Keep an eye out for what happens in q4 and throughout 2016 when Powerwall installs start to ramp up. California ISO just put out that they are going to accept aggregated distributed energy at market prices. So when we see 10k Powerwall+Solarcity pv installs come on line by the end of the first quarter 2016 and each storage+pv homeowner getting the lowest cost per kWh on the block, there is no way anyone could compete on solarcity's level no matter how much consolidation.

elon proved Friday battery tech is going to make 5% and more improvements every year moving forward so, this is only going to drive Solarcity costs down further and at the same time increase sales many times over. The point of no return will be when homeowners see their bill after aggregation of solar+pv in California starting next year, in my opinion. The 10k nest thermostat giveaway is just a glimpse at what Solarcity is going combine with it and value add along the way.

solarcity and tesla have been planning this for nearly a decade. It is paying and will continue to pay to be a visionary brand that sticks to its independence along with it first mover market position compared to the rest.

sbenson,
yeah it's been frustrating with the volatility, but expected somewhat given the completely new entrance of DG solar as rising powerhouse within the energy sector. No one really knows much about it so when oil goes down some investors freak out, or when utiltiies propose ending net metering or any type of policy change is proposed, they hit the sell button. The other factor is the hedging by being done by those that have given large amounts of capital thus far.

to me, the fundamental shift is clear and no matter how bumpy the road may get along the way, Solarcity is reaching the rare air one way or another...sooner or later... Those big valuations can run, but never hide...

Foghat, you're right. Using Vivint's market cap is probably over conservative. I do think that SolarCity continues to be hugely undervalued. So I am hope even for a rather conservative valuation to get the stock price over $80.

- - - Updated - - -

There is this concept of hostile takeovers.

Lets suppose the net-retained-value reaches $10B but market cap stays $5B. Then Carl Icahn can come in offer 100% premium and take the company private and put it under his control. Even worse he will finance the purchase putting the company as collateral!

Then what happens to all the future growth? that's simply taken away from us for free.

In my view that's the biggest risk for long term shareholders who want to see a multi-bagger out of SCTY. The stock price better keep up with the company growth or else it can get taken out.

Nobody is going to strangle this goose while it is laying golden eggs. Musk, who owns 20%, is certainly not going to let that happen. SolarCity is undervalued, and now the market knows that. I am not worried about a hostile takeover.

 

[Robert.Boston]

What energy shortage? | Global Development Professionals Network | The Guardian

centralized traditional utilties lose 60% of its energy from generation through to end user.

That is more than a little deceptive. About 54 percentage points of that "60%" is in the conversion from the theoretical heat content of fossil fuels into electricity. Transmission and distribution losses are only about 6% of generated power. By this standard, solar loses about 75% of its energy from the get-go, because typical residential solar panels are only about 25% efficient, plus inverter losses.

 

[adiggs]

There is this concept of hostile takeovers.

Lets suppose the net-retained-value reaches $10B but market cap stays $5B. Then Carl Icahn can come in offer 100% premium and take the company private and put it under his control. Even worse he will finance the purchase putting the company as collateral!

Then what happens to all the future growth? that's simply taken away from us for free.

In my view that's the biggest risk for long term shareholders who want to see a multi-bagger out of SCTY. The stock price better keep up with the company growth or else it can get taken out.

Only if enough shareholders accept the 100% premium to the share price and tender their shares. You could vote no in that instance. And there are some big individual share holders with a mission - would they accept that price in a hostile takeover? Would the board recommend for or against acceptance of a 100% premium, and how much of the owner base would be swayed by the input and argument that the Board would make in that instance?

I barely follow Solarcity, but I suspect the answer is that any friendly or hostile takeover that doesn't have the full backing of Elon and the Rives is dead, however that backing is achieved. And I don't think that a purely monetary offer, absent silliness, can get it done (and a good chance that an offer with nothing for it but money, even at silly levels, also fails).

 

[Foghat]

Burton celebrates going solar - News - Porterville Recorder

First school with tesla storage and Solarcity PV installed. 1.8MW system.

 

[atang]

Burton celebrates going solar - News - Porterville Recorder

First school with tesla storage and Solarcity PV installed. 1.8MW system.

Thanks for that Foghat, the future is here!

 

[jhm]

I am hopeful that SolarCity may post some growth in the commercial segment. It has not been growing for several years, while overshadowed by more than annual doubling in the residential segment. I think Zep has made some big advances in hardware to reduce the installed cost of commercial installations. Last ER they mentioned a flat roof that would ordinarily require 20 days to install being completed in 3 days. So hopefully these efficiency gains are translating into more commercial work.

We may even be able to track large installations in the media. A few days ago HEB got 1.2MW and now Burton is posting 1.8MW.

Of course, the big project will be the Gigafactory, which could be over 100 MW just on the roof.

 

[jhm]

SunEdison boosts Australia presence as it targets global oil giants : Renew Economy
SunEdison aspires to grow by acquisition.

How SunEdison views their standing amongst peers.

SunEdison aspires to add 1GW of renewable assets per quarter. They recently acquired Vivint Solar for $2.2B and First Wind for $2.1B. They also created TerraForm to serve as a yeildco. So their acquisition strategy seems to be rather horizontal. They want a large, diverse portfolio of renewable energy assets. SunEdison wants to play on both the utility and distributed energy side.

SolarCity should add about 1GW for all of 2015, but doubling every year leads to 1GW per quarter in 2017. This is organic growth, not growth by acquisition. SolarCitySolarCity's acquisition strategy is quite vertical. All the components facilitate delivering distributed solar energy.

SunEdison's market cap stands at $8.0B, but once the acquisition is complete the combined company may be worth $10B. SolarCity's market cap stands at $5.44B. If properly valued relative to the Vivint acquisition, it may be worth in excess of $10B. It will be interesting to compare how these two contenders grow in the coming years. My money is on SolarCity, but there is plenty of incumbent market share for both to feast upon in the coming decades. Supermajors? Not yet.

 

[Foghat]

SunEdison boosts Australia presence as it targets global oil giants : Renew Economy
SunEdison aspires to grow by acquisition.
View attachment 88184
How SunEdison views their standing amongst peers.

SunEdison aspires to add 1GW of renewable assets per quarter. They recently acquired Vivint Solar for $2.2B and First Wind for $2.1B. They also created TerraForm to serve as a yeildco. So their acquisition strategy seems to be rather horizontal. They want a large, diverse portfolio of renewable energy assets. SunEdison wants to play on both the utility and distributed energy side.

SolarCity should add about 1GW for all of 2015, but doubling every year leads to 1GW per quarter in 2017. This is organic growth, not growth by acquisition. SolarCitySolarCity's acquisition strategy is quite vertical. All the components facilitate delivering distributed solar energy.

SunEdison's market cap stands at $8.0B, but once the acquisition is complete the combined company may be worth $10B. SolarCity's market cap stands at $5.44B. If properly valued relative to the Vivint acquisition, it may be worth in excess of $10B. It will be interesting to compare how these two contenders grow in the coming years. My money is on SolarCity, but there is plenty of incumbent market share for both to feast upon in the coming decades. Supermajors? Not yet.

I read Lyndon Rive's comment on the acquisition and couldn't agree more... Sunedison now will contribute to the political/policy fight against Anti-DG utilties with deep pockets.

Hawaii appears to be in the midst of determine the value of solar and net metering compensation moving forward. Sunedison support could be some added ammo in the fight. Here's an article out today on it:
Inside Hawaii's landmark regulatory proceeding to value distributed resources | Utility Dive

solarcity is growing nearly 100% organically. A big difference with Sunedison. Solarcity has a singular mission under one singular brand. Sunedison is a mix of different brands and organizations. I feel Solarcity will dominate the DG game where Sunedison may not want to be that focused.

 

[jhm]

I read Lyndon Rive's comment on the acquisition and couldn't agree more... Sunedison now will contribute to the political/policy fight against Anti-DG utilties with deep pockets.

Hawaii appears to be in the midst of determine the value of solar and net metering compensation moving forward. Sunedison support could be some added ammo in the fight. Here's an article out today on it:
Inside Hawaii's landmark regulatory proceeding to value distributed resources | Utility Dive

solarcity is growing nearly 100% organically. A big difference with Sunedison. Solarcity has a singular mission under one singular brand. Sunedison is a mix of different brands and organizations. I feel Solarcity will dominate the DG game where Sunedison may not want to be that focused.

Where was this quote from Lyndon?

So does this acquisition basically represent an interest aligned with the utility business model capturing significant competition to that model? So a 52% premium is what it costs to buyout competition. Sunrun may become the next on the list. Might not be a bad play to buy Sunrun before it gets acquired.